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Federal Court Shuts Down Pay As You Go Wireless

Posted by ScuttleMonkey on Tue Oct 18, 2005 07:28 PM
from the pay-as-you-go-out-of-business dept.
Businesses Patents
self assembled struc writes "BCGI has been found guilty of infringing on pay-as-you-go wireless patents owned by Freedom Wireless. This means that cellular providers who use BCGI pay-as-you-go billing systems must immediately stop selling new service. For the next 90 days, as they wind down their service, they will have to pay Freedom Wireless 2.5 cents per airtime minute used PER CUSTOMER. This heralds a farewell to Cingular's Go Phone and Sprint-Nextel's Boost services, both powered by BCGI."
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  • I'm using Cingular's Go Phone (Score:5, Funny)

    by Anonymous Coward on Tuesday October 18 2005, @07:29PM (#13822857)
    For wireless dial-up access, and I haven't noticed any

  • America (Score:5, Insightful)

    by Monkelectric (546685) <`slashdot' `at' `monkelectric.com'> on Tuesday October 18 2005, @07:31PM (#13822868)
    Where you can patent something obvious, and then prevent someone else from doing that obvious thing.

    Lets hang our heads in shame.

    • Re:America (Score:5, Insightful)

      by Anonymous Coward on Tuesday October 18 2005, @07:38PM (#13822930)
      *shrug* yeah. I've long since realised the whole concept of freedom in the US is lip service to some ideal everyone would like, and everyone has convinced themselves they have, but has long since left on the wings of excess litigation, patents, government regulations and stupid laws. It wasn't until I left here for three years that I saw the reality is not much difference in many places overseas, but at least they're not running around spouting the "we're free" rhetoric and believing it.

      The patent system is part of that whole demise, where so much is said about it being a good thing to protect innovation, but the reality is the opposite. Guess people are really good at convincing themselves what they say is true, and be damned working towards what's said. Walk the walk, etc.

        • Re:America (Score:5, Interesting)

          by mattkinabrewmindspri (538862) on Tuesday October 18 2005, @10:11PM (#13823784)
          Apparently they patented the idea of using a database to keep track of your wireless usage [boston.com]:
          Freedom Wireless, a four-person company, has never set up an actual business serving customers; it seeks royalties from companies like BCGI, Verizon Wireless, and Nextel Communications Inc. At the heart of Freedom's 1996 patent is the idea of using a computer to match a cellphone number with a database showing how many paid-up minutes the cellphone owner has, then deciding whether to complete a call.

          I guess no one's ever thought up that particular use for a database before...

            • Re:America (Score:4, Insightful)

              by Jekler (626699) on Tuesday October 18 2005, @11:32PM (#13824104)
              I strongly feel that patents should be tied to one's ability to implement the idea. Any jackass can sit around and think up ideas. I really don't like the "I thought of it first!" patent system in the U.S. If you're going to have a patent system, it should be based on who does it first not who sat on the toilet longer.

    • Re:America (Score:5, Insightful)

      by cpu_fusion (705735) on Tuesday October 18 2005, @08:07PM (#13823126)
      Yes, let's hang our heads in shame. For a moment.

      Then let's get active and do something about this. If thousands of geeks can't manage to communicate to the millions of Americans how REDICULOUS this crap is, how it enslaves them financially, the injustice of it all .. if we can't communicate that with the INTERNET available, well then we deserve what we have.

      Oh wait. I got to go play World of Warcraft. Nevermind.

    • Re:America (Score:5, Insightful)

      by Geoffreyerffoeg (729040) on Tuesday October 18 2005, @08:18PM (#13823192)
      Sorry, but you forgot the word "method".

      America, where you can patent a method of doing something obvious, and then prevent someone else from picking that method out of the many ways to do that obvious thing.

      Three cheers for forced innovation.

      Now if only the patent office knew how to figure out what could be innovated upon - indeed, what patents would encourage innovation, by protecting the innovators and forcing other people to develop alternate methods with useful side results - and what is actually obvious and can't be done differently.

      But I'm inclined to think that there isn't just one way to run pay-as-you-go. For example, you could transfer the whole balance to the phone in some encrypted manner, or you could have the phone check every minute whether the balance expired. You could keep its own true account, or you can model it as a phone with infinite airtime and a forced calling card. And so forth. There's more than one way to skin a prepaid cat.

    • Re:America (Score:5, Funny)

      by thegrassyknowl (762218) on Tuesday October 18 2005, @08:27PM (#13823240)

      Where you can patent something obvious, and then prevent someone else from doing that obvious thing.

      You are infringing on my patent:

      My idea is the generic method of using a muscular diaphragm to apply force to a bag made of human tissue in order to draw air into and expel air from the bag for the purpose of respiration!

      Please pay me $0.025 for every breath you take.

    • something obvious (Score:5, Interesting)

      by John Sokol (109591) on Tuesday October 18 2005, @09:35PM (#13823595) Homepage Journal
      I haven't seen the patent first hand, but often something obvious now, wasn't at that time. If it were then why wasn't someone else doing it already.

          I can list many examples of this. The mouse, keyboard, screens, printers, windowing environment, The Internet, an Operating system and even a CPU and the IC chips, were at the time major conceptual steps forward.

        I can't tell you how hard it was to explain what the Internet or even a Network was to people in 1983, they just couldn't grasp it.

        With patents if someone has been doing something then a patent gets filed by another person at later date, then the group getting sued must try to show that, if they can the patent holder will have to pay like multiple damages and costs.

        So as a patent holder you never want to go to court with a weak patent.

        But in practice, most people loose their nerve at the first letter from a patent holder, even if its a weak patent that wouldn't hold up.

        As a result many people end up paying royalties or giving up without a fight, when they really would win and have that patent tossed out.

        I have come to realize much of patent law is a poker game.

        For a large company like Microsoft they look at the strength of a patent and the value of the company holding it and decide is it cheaper to pay or infringe. And same in reverse, even if a patent isn't worth the paper it's written on, if the company they sue can't afford to challenge it, then they win.

          AT&T did this to many companies they felt were competition, file dozens of bogus suite against one company, from many little companies they control, and drive the small players out of business while leaving there name out of it.

      • Re:Well.... (Score:4, Insightful)

        by MikeFM (12491) on Tuesday October 18 2005, @08:09PM (#13823133) Homepage Journal
        You mean the phone counts how many minutes you use it and deducts those minutes from your account as you use them. Gee I never would have thought of doing that. Doh. If it's obvious it shouldn't be patentable. Simply taking a common practice and moving it to a new technology or industry should not qualify as something worthy of a patent.

        Intellectual protection laws are shortsighted and don't work. If you can't keep innovating fast enough to profit then you deserve to go broke. Throw everyone to the sharks and let those who are smart enough and fast enough to stay ahead do so and the rest can get ate up and pooped out.

  • Well... (Score:5, Funny)

    by Ceirren (849938) on Tuesday October 18 2005, @07:31PM (#13822870)
    Looks like they'll be paying as they go! Hahahahaha

  • So... (Score:5, Funny)

    by lenmaster (598077) on Tuesday October 18 2005, @07:32PM (#13822884)
    I guess the name "Freedom Wireless" is an ironic choice.

    • Re:So... (Score:5, Funny)

      by wo1verin3 (473094) on Tuesday October 18 2005, @07:36PM (#13822913) Homepage
      Well it rolls off the tongue better then what they were originally going to name the company "Full of Nazi Patent Whores Wireless".

    • Re:So... (Score:5, Funny)

      by gad_zuki! (70830) on Tuesday October 18 2005, @08:11PM (#13823144)
      > I guess the name "Freedom Wireless" is an ironic choice.

      Only in pre 9/11 America.

      *rimshot*

      Not as catchy as "In Soviet Russia" but it has potential. In post 9/11 America, freedom wireless takes your phone!

  • Wait one second... (Score:5, Funny)

    by NETHED (258016) on Tuesday October 18 2005, @07:34PM (#13822891) Homepage
    I read the article. Is this for EVERYONE in the country? What will happen for all the users of these phones. What about tracfone, they've been at it for YEARS, does this affect them? I need clarification or some unfounded speculation, both would be nice.

    • Re:Wait one second... (Score:5, Insightful)

      by bypedd (922626) on Tuesday October 18 2005, @07:42PM (#13822947)

      Furthermore there's the issue of all those people who will be out of a phone, possible their only one. I'm sure they won't be getting a sweet deal switching over to the patent-holding company - Shooting the competition in the back of the head is a perfect way to clear the path to raised prices for consumers forced to switch.

      It's a shame that laws originally intended to protect individuals or the little guys get turned into legal feeding grounds that do nothing but hurt the consumer and the diversity of the marketplace.

    • Doesn't affect everyone (Score:5, Informative)

      by Anonymous Coward on Tuesday October 18 2005, @08:16PM (#13823177)
      From another Reuters story [reuters.com] on this topic:

      Cingular Wireless spokesman Mark Siegel said the injunction does not apply to the "vast majority" of Cingular's prepaid wireless customers, who use a different type of network technology.

  • One Word.... (Score:4, Funny)

    by Anonymous Coward on Tuesday October 18 2005, @07:34PM (#13822894)
    BULLSHIT!!!

    You'll NEVER stop me from getting FREE WIFI off of my Pringles Can!!!
    Take THAT FCC!!!

  • After hearing the verdict (Score:4, Funny)

    by Koil (786141) on Tuesday October 18 2005, @07:37PM (#13822918)
    He then turned and walked defiantly from the court room, only to sheepishly return and ask "Um....anyone have a cell phone?? I need to call my lawyer."
  • I hope we can rely on federal court to rid us of these patented monopolies.

  • Business Model Patents Suck! (Score:5, Insightful)

    by N8F8 (4562) on Tuesday October 18 2005, @07:46PM (#13822976)
    business model patents [google.com] really are the great evil of the patent world. See it strangling industry after industry.
  • I remember reading about this case a few weeks ago in the Wall Street Journal. The article was entitled "Patent litigants pose growing threat to business."

    The first paragraph brought to light one of Freedom Wireless' founder's criminal past (it involved stolen cars) as well as the fact that the founders had previously gone after GTE for similar issues (alleging stolen trade secret). GTE ended up getting paid $90,000 in legal fees, a statement that GTE had never stolen a trade secret, and a promise never to sue GTE again.

    Fast forward a few years. Freedom Wireless currently does nothing but patent ligitation. These men are patent trolls.

    The Wall Street Journal charges for their archives, but the full text of the same article is available here [post-gazette.com].

    - Neil Wehneman

  • I use Virgin Mobile... (Score:5, Funny)

    by NeuroManson (214835) on Tuesday October 18 2005, @07:58PM (#13823066) Homepage
    Does this mean I'm screwed as well?

  • Whew! Safe! (Score:5, Informative)

    by Macgruder (127971) <chandies DOT williamson AT gmail DOT com> on Tuesday October 18 2005, @07:58PM (#13823070)
    From the summary: "This heralds a farewell to Cingular's Go Phone and Sprint-Nextel's Boost services, both powered by BCGI."

    In regards to Cingular, not exactly.

    Cingular has two forms of prepaid service (GoPhone).

    One is 'Pick-Your-Plan'. You have a reoccuring monthly charge on your credit or debit card which gives you a monthly allowence for service.

    The other is 'Pay-As-You-Go'. You buy a prepaid card off the rack, and use that to make your calls on your cell. As you use it up, you replace the card. That's the part that will be affected by this ruling.

  • It's as crazy as it sounds (Score:5, Informative)

    by Mostly a lurker (634878) on Tuesday October 18 2005, @07:58PM (#13823072)
    The patents is question are 5,722,067 filed in 1998 [freedom-wireless.net] and 6,157,823 filed in 2000 [freedom-wireless.net].

    • Ummm, aren't those patents effectively the same, differing mainly in the correction of grammatical errors and some rewording? If so, then did the USPTO effectively issue the same patent to the same company twice? Can they do that? Wouldn't the first patent exist as prior art for the second patent?

      Judging by the looks of the two patents, I'd guess the first patent was written by someone not very skilled at writing patents (or writing in English, for that matter) and the second was written by an actual p

  • Might be a good thing... (Score:5, Insightful)

    by PAPPP (546666) on Tuesday October 18 2005, @07:59PM (#13823075) Homepage
    Although this is immediately disgusting, in the not-so-long-run this might end up being a good thing, this is putting a kink in Sprint/Verison and Cingular's (the big mean companies with nearly inexhaustible legal resources) business model, who will likely lash out against it. If all goes well for them, it will end up creating a substantial precedent against this kind of business-method patent, which would inadvertently improve the patent law situation in the U.S., if we're lucky it might even catalyze a wider reform.
      • I don't think he was hailing the businesses. His statement is probably better interpreted as "the big, selfish companies are fighting each other and the winner will be the rest of us".

        His point was completely logical.
      • I'm certainly not saying they're doing this for the greater good, but look at Sony v. Universal (aka the betamax decision [eff.org]), Sony was fighting for profits, but ended up establishing the substantial non-infringing use argument, inadvertently doing something for the greater good as a result of their "profit protecting". Also notable, the betamax format failed anyway, and the decision is now reviled by their entertainment divisions, the good part outlasted the greed.

  • Seems like an excellent rallying cry for reform (Score:3, Insightful)

    by LetterRip (30937) on Tuesday October 18 2005, @08:02PM (#13823101)
    I think this could wake up the public to the need for patent reform in a way that other things would not.

    Everyone uses wireless, pay as you go is a fairly obvious idea to pretty much anyone. A sudden skyrocketing price for cell phone calls will piss people off quite a bit.

    LetterRip

  • The system works! (Score:3, Funny)

    by KarmaBlackballed (222917) on Tuesday October 18 2005, @08:03PM (#13823105) Homepage Journal
    Let this be an example to those of you that pooh-pooh our patent system. See, it works!

  • On the other hand... (Score:3, Funny)

    by gui_tarzan2000 (625775) on Tuesday October 18 2005, @08:17PM (#13823190)
    My daughter has a pay-as-you-go phone. Maybe this isn't such a bad thing.

  • I have been spending a lot of time in Vietnam recently (6 months of the last year) and while I am there I always use my prepaid mobile phone. It is very sad to see that many companies over there can do it but there is a patent on such a simple idea here in the US.

  • Boost Mobile dead within 90 days? (Score:3, Funny)

    by crimethinker (721591) on Tuesday October 18 2005, @08:44PM (#13823331)
    I'm torn - on the one hand, this patent rivals "Method For Exercising A Cat Or Other Animal With A Chase Instinct Using A Laser Pointer" in sheer chutzpah. On the other hand, never having to hear "yo, where you at?" ever again sounds like a great thing.

    /me HATES boost mobile for their gangsta commercials

    -paul

  • Easy patent reform: (Score:3, Insightful)

    by laughingcoyote (762272) <barghesthowl&excite,com> on Tuesday October 18 2005, @08:52PM (#13823370) Journal

    PRODUCE the thing you patented, or lose the patent. Period. And if you are producing it, be treated (and regulated) as a monopoly in that area, since patents by definition grant monopolies. Patents only on real, tangible, physical items-no business methods, no software, no genetics.

    There is NO excuse for the way the patent system is currently. Just because you're the first to do something doesn't mean it's non-obvious. Incremental changes or "improvements" should not be patentable-the inventor of cell phone technology should get a patent, the guy that figures out a better way to use it should not. Nor, generally, should the guy that figures out how to extend range by 10%.

    Hopefully, larger companies continually getting hit by these things will lead them to recognize that pretty soon you're not going to be able to move, breathe, or fart without infringing on something patented. I certainly hope that leads them to reconsider the path they're going down, and use their influence to do something worthwhile for once.

  • Eminent Domain? (Score:4, Interesting)

    by serutan (259622) <doug&geekazon,com> on Tuesday October 18 2005, @11:11PM (#13824031) Homepage
    Local governments can kick people out of their houses for the sake of public works projects, and lately they've been doing it for commercial projects. The federal government can void patents in the name of national security. I'm not in love with either practice, but as long as those are the rules we have to live under why can't the principle of eminent domain be invoked to override a patent claim that denies a valuable service to a significant number of people. Especially if the technology has been in use for a while.

    • A bit more extensive writeup: (Score:5, Informative)

      by andreMA (643885) on Tuesday October 18 2005, @07:43PM (#13822957)
      here [businesswire.com]
      Doesn't include the information I was looking for, but does give a bit more detail.

        • Re:Dollars to doughnuts... (Score:4, Insightful)

          by wernercd (837757) on Tuesday October 18 2005, @08:06PM (#13823122) Homepage

          And Democrats don't have greedy self serving hypocrits in their party? or do you honestly believe that Clinton wasn't a greedy, self-serving hypocrit?

          For every republican you can find that's corrupt I can find a democrat...

          which goes to show that blaming the party affiliation in a situation is as retarded as pulling the race card (Which the majority of the time is bullshit). There are retards on both sides of the fence and blaming based on party don't fix OR address the real problems - or keep the threads on topic.

          If all you can say is 'it must be a republicans fault' your just showing your own ignorance. But... that's just my two cents
    • RTFA, it was a jury trial. Whoever thought that business method patents were a good idea? "Yeah, we'd prefer if we just didn't have to compete in the marketplace -- please give us a government granted monopoly."

      • Re:Lets yell (Score:5, Interesting)

        by Lemmy Caution (8378) on Tuesday October 18 2005, @07:57PM (#13823057) Homepage
        See, one of the problems of the political culture in this country is this: the people who are suspicious of corporate power are too trusting of government power to allocate resources for social change; the people who are suspicious of government power have a hard-on for the public sector (without realizing that wealth will always - always - muster power to protect itself) and, often, for the military. (The biggest weak-point in libertarian thinking is class-blindness - they think they are serving hard-working middle- and-upper-middle-class americans without understanding that this is exactly the class the created the Leviathan of state to begin with, and in whose interests it ultimately works.) This means that the political will to muster things like a reform of patent law will never occur unless it happens in a way that is in the interests of power.

        Which may be happening here: the Cingulars and Nextels may start getting annoyed enough by the absurdities of patent law and the effect on their bottom line that they start to lobby for a change. Unfortunately, the change is not likely to make things any easier for the bulk of us.

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